Restrictive covenants protect against competitive practice

A restrictive covenant on your existing partners is important to governing the practice for its own success. For starters, if you don't impose such restrictions on yourselves, you will find it difficult to justify them to young doctors you bring into membership.

Many groups flounder because they accommodate their partners' varied priorities rather than their best organizational goals. The solution: Make all partners subject to restrictive covenants. In addition, having the restriction apply to all says that the group is more important than any partner.

Yet, even if logical and correct, this advice may not convince a partner to surrender present freedom to stay or leave at will. But if you recognize that your long-term security depends on group success, you may have to accept restrictions.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.